According to equity theory,pay satisfaction is a function of the comparisons of an individual's input-outcome ratio with his or her perceptions about the input-outcome ratios of referent others.

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This is an accurate statement of equity theory, which proposes that individuals compare their input (e.g., effort, skills, experience) and outcomes (e.g., pay, rewards, benefits) to those of others in similar situations in order to gauge the fairness of their pay. If they perceive that their input-outcome ratio is less favorable than that of their referent others, they may experience pay dissatisfaction and may seek to restore equity through various means (e.g., reducing effort, seeking higher pay, changing referent others).

According to Equity Theory,pay Satisfaction Is a Function of the Comparisons